Almost a year ago in June of 2016, the people of the UK voted to leave the European Union (Brexit). This month it was announced that the negotiation between the EU and the UK to implement the Brexit would pause and continue in December of this year. Although it has become less clear over time regarding how all aspects of Brexit will be implemented, it is already known that pharmaceutical companies will be greatly impacted.
Despite the lack of clarity on how the UK will leave the EU and the future relationship between the two, the timeline was clear from the moment the British government invoked Article 50 of the EU treaty. As of the end of March 2019 the UK will no longer be part of the EU. This is known as a “hard” Brexit without a gradual transition period.
Impact to Companies with UK-based Functions
Recently the EMA announced that the rules as laid down in the regulations and directives will apply unchanged regarding the functions and operations that must be performed within the EU or by a citizen of the EU. Brexit will not affect nor change them. For pharmaceutical companies that have their EU affiliate based in the UK, this will have severe consequences. Replacement functions must be set up in the EU before 30 March 2019.
- A company can only be Marketing Authorization Holder in the EU when it is based within the Union. When Brexit becoming effective, companies residing in the UK no longer fulfil this requirement. Companies which have the Marketing Authorizations in UK companies will have to transfer them to affiliates that are within the EU. As indicated by EMA this process should be completed before the Brexit comes into force.
- For products approved through the Centralized procedure, a separate national license will most likely be needed to continue to market in the UK. The MHRA intends to issue all these licenses, most likely based on administrative data.
- A similar situation applies for the staff of these companies. Certain functions must reside within the EU, in particular the QP (responsible for the release of the product for the EU market) and the QPPV (pharmacovigilance). Companies with their affiliate and the corresponding staff in the UK, must transfer these responsibilities to an affiliate and staff that fulfills this requirement and resides within the EU and are EU citizens.
- Companies that have the UK as rapporteur/co-rapporteur or Reference Member State will have to find a caretaker for their product(s). This will need some coordination on both sites agencies and industry; require negotiations with the agencies to find out whether they are willing and able to take over these responsibilities from MHRA; and even some coordination to prevent all procedures from ending up within a limited number of agencies. For the Centralized procedure the EMA on its own can decide who will take over; for the decentralized and mutual recognition procedures more negotiations are needed.
EMA Planned Move
Another point that companies need to consider is that EU Agencies must be located in the EU. Moving the London-based offices will impact the function of the EMA in several ways:
- The EMA is planning a move from its current London location in the 6 months before Brexit. Based on purely logistical considerations, this will reduce the capacity to process new submissions, let alone all of the variations that are needed to change Marketing Authorization Holder, QP and/or QPPV.
- The moving of an organization always affects the staff and losses of essential staff that is not willing to follow the organization cannot be avoided. In addition, UK citizens will no longer be able to work for the EMA. A good example was the move of BfArM from Berlin to Bonn as a result of the German unification. It took years before the BfArM completely “recovered” and filled all the open positions resulting from loss of staff that was not willing to move. This was despite very generous relocation packages. Something similar can be expected for the EMA move. This will affect the ability of EMA to process all variations in the period just before March 2019.
Planning Brexit Strategy
To have a seamless transition with no or minimal impact from Brexit, take action now.
- Establish a multi-disciplinary team to consider the aspects such as different country legal systems and tax laws, logistics, availability of staff, cultural differences, etc.
- Make the technical decisions for how the company wants to function in both the EU and UK after March 2019.
- Set up the transition plan and timeline to implement the plan.
March 2019 is Approaching Faster than You Think
Since the EMA issued their guidance even before the negotiations started, there is a clear view of what things have to look like after March 2019. EMA has requested that sponsors submit the necessary variations to be prepared for Brexit sooner rather than later.
We cannot emphasize strongly enough the importance of listening to the EMA recommendations and start taking action now or there will be delays in procedures or temporary halts in marketing of products in EU or the UK as a result of Brexit.
Small details may influence the outcome considerably. Choices made in this process can influence the complete life cycle of products and the ability of companies to act and to sell. There is opportunity to plan upfront. It will take much longer than you think to transition to life after Brexit. March 2019 is fast approaching.